Russia’s Crypto Law Would Allow Relevant Authorities to Confiscate Digital Assets

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As the number of cybercrime cases continues to soar around the world, Russia seeks to establish a law that would give its police force and other relevant authorities the right to confiscate ill-gotten digital assets. 

As reported by RBC Thursday, Russia’s Ministry of Internal Affairs is working on a proposal that would enable law enforcers to force criminals to turn over digital assets once it has been proven that they have acquired the assets illegally. To help the ministry in accomplishing the almost impossible task, other state organizations such as the Prosecutor General’s Office, Federal Customs Service, Investigative Committee, and the Federal Security Service have already offered their help. The Supreme Court and the Justice Ministry would closely monitor the legislation as well.

According to Nikita Kulikov, the chief of a Russian parliament dedicated committee, the number of crimes that involve digital assets is alarmingly on the rise. He noted that the criminal onslaught has to stop.

Aside from establishing mechanisms that would give authorities the power to control crypto exchanges in the event of a cybercrime, Russia also plans to launch a government crypto wallet where the seized funds from criminals would be transferred. 

A long way to go

Notably, the authorities behind the proposal are optimistic that the legislation would become law in 2021. However, as analysts have noted, the country has yet to unveil its much-anticipated package of crypto laws. There had been multiple delays in the past for undisclosed reasons.

Sources familiar with the matter shared with RBC that cryptocurrencies must first be given with legal recognition before the Russian government could draft and validate legitimate grounds to repossess such assets as part of court proceedings.

How the government would confiscate digital assets remains unclear. However, RBC thinks that crypto exchanges would be ordered to cooperate during a criminal investigation. Once they comply, the authorities would be able to access the funds that belong to an individual or business in question. Meanwhile, the method of obtaining cryptocurrencies stored in wallets still baffles industry analysts since the private keys are only known to investors.

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